The pace on Dixon's line

At first glance, it would look like crass stupidity to invest in Dixons, Britain's largest retailer of electrical goods. Reasons for avoiding the stock are well rehearsed: the threat from internet shopping, increased competition from supermarkets, and falling prices for products such as DVD players.

The group, whose shops include Currys and PC World, is also vulnerable to interest rate rises and a possible downturn in consumer spending. But Dixons under John Clare doesn't strike me as a company about to go down the tubes. Clare has already grasped the nettle by announcing the closure of half of all Dixons-branded stores as part of a pre-emptive strike against harsher trading conditions. The company is investing in larger, modernised outlets - a long overdue revamp.

True, Dixons must rely less heavily on the money it derived from extended warranties following a competition inquiry which judged that Dixons and others had milked consumers. But the warranty story is discounted by the current share price of 156p. And the group's growing European franchise is beginning to make a difference, just when life in the UK gets harder.

Dixons remains a highly cash-generative company and at the last count had net cash of about £370 million. Annual figures this week are expected to show profits of £325m and like-for-like sales up 1 or 2 per cent.

But the numbers will be less interesting than an indication from Clare as to how he intends to spend the company's cash pile. A share buy-back at some point looks like a 'slam dunk'.

Black Horse breaks into a trot

Expect another boring trading update from the Black Horse tomorrow. While HBOS, HSBC and Royal Bank of Scotland have grabbed the limelight with bold acquisitions at home and abroad, Lloyds TSB has been selling businesses to avoid the shame of having to cut the dividend.

Under Brian Pitman in the 1990s, Lloyds was the largest of the clearing banks; now it is one of the smallest. No one is yet entirely clear how new chief executive Eric Daniels plans to increase earnings or revive what used to be an excellent brand, so hopefully his statement tomorrow will enlighten us.

Actually, Lloyds shares have been doing rather well, closing at 436p on Friday, against an annual low of 390p. It is still an industry laggard, but there are several reasons to be cheerful.

Now that Daniels has sold the New Zealand operations, no major broking house believes that the dividend will be cut. It is yielding 7.5 per cent, so investment institutions have been piling in to buy the stock on the basis of income alone. Forecasters say the yield should hold at 6 per cent or more in 2005.

In addition, the City is increasingly recognising that Lloyds offers defensive qualities in the event of a consumer slump. Competitors have been more aggressive on the mortgage front, but Lloyds has preferred to protect its margin rather than compete on price, so its mortgage book is less exposed to bad or doubtful debt.

Elsewhere, Daniels appointee Archie Kane, new boss of insurance offshoot Scottish Widows, is making progress in turning around a business that has never lived up to market expectations.

Of course, Daniels has to demonstrate he can increase group earnings, and the jury is still out on that one. But he has shored up the bank's capital base, secured the dividend and taken action to revive Widows (a sale at some point cannot be ruled out).

This is a good start, setting the scene, one hopes, for better things to come - and not before time.

RMC starts to set into shape

For years RMC, the world's biggest ready-mix concrete maker, has been the recovery story of tomorrow. But the signs are that new management under Sir John Parker, former boss of Harland & Wolff and current chairman of National Grid, is finally paying off.. Costs are being ripped out and Parker is reshaping an unwieldy management structure. Expect an announcement on a reorganisation of the chain of command in the next week of two.

Parker has appointed a new chief executive in David Munro from mining colossus BHP Billiton, who I understand is impressing fund managers.

Some pundits still fret about Munro's lack of experience in the specialised world of concrete, aggregates and cement, but they worry too much. No one cared when former Vodafone boss Sir Chris Gent was appointed as chairman-elect of drugs company GlaxoSmithKline. Munro, like Gent, knows his onions - besides, concrete is more akin to mining than telecoms is to pharmaceuticals.

But the real story is that RMC's German business is showing signs of revival, with price rises sticking and forecasters saying the division will be back in the black by 2005. Similarly, RMC's Rugby cement operation is benefiting from price inflation and stronger demand. Holes in the balance sheet are being plugged.

Broker UBS has a price target of 775p against Friday's close of 584p; rival house DKW is less bullish but says the stock could easily hit 650p by the end of the year - up 13 per cent.